Romney and Rent-Seeking

I teased Obama for his “you didn’t build that” gaffe, so it’s only fair that I say something about Romney’s infamous “47%” remark. A friend of mine says that rather than pick on Romney we should “address the very real concern that liberals are using the ‘safety net’ to create a majority underclass that makes our whole system and political class impervious to change or criticism.”

I too was puzzled by the outrage over Romney’s gaffe; wasn’t he just expressing the median voter theorem? But there’s a more substantive point here. My friend is right about welfare bums, just not exactly in the way he thinks. It’s true that many Americans are drinking deeply from the public trough and will resist any attempts at fundamental entitlement reform. These are not the urban poor, however, but the government-connected firms, professionals, bureaucrats, and other rent-seekers who enjoy special privilege at the expense of the rest of us. Try to get US manufacturers to support free trade, farmers to give up crop subsidies, defense contractors to end foreign wars, doctors to relax licensing restrictions, and so on. How many commercial bankers are lining up behind Ron Paul’s call to abolish the Federal Reserve System and subject banks to real competition? Are ADM, Cargill, and Bunge lobbying to reduce taxpayer expenditures on foreign aid? Come to think of it, how many professors at US public universities want to cut subsidies for higher education? (“Hey, don’t touch my research budget, bro!”)

Mencken famously quipped that “every election is a sort of advance auction in stolen goods.” Indeed, given the magnitude of the rents, we should perhaps be surprised that rent-seekers aren’t fighting even harder for a piece of the action.